Should You Pay for Leads or Build Your Own Pipeline

Angi charges $15-85 per lead depending on your trade and market. Thumbtack runs $35-75. Every one of those leads gets sent to 3-5 other contractors at the same time.

Your close rate on shared leads? 10-15% if you’re fast and good on the phone. The other 85-90% of the money you spent on those leads goes straight to waste.

Now consider leads from your own website, your own Google rankings, your own referral network. Those close at 40-60%. The homeowner found you, chose you, and reached out to you specifically. Nobody else is getting that call.

The economics of paying for leads vs building your own pipeline aren’t even close. But the transition takes planning, patience, and a willingness to invest in something that doesn’t pay off immediately.

The lead marketplace trap

Platforms like Angi, Thumbtack, and HomeAdvisor built a business model around selling the same lead multiple times. From their perspective, it’s brilliant. One homeowner request generates revenue from 3-5 contractors.

From your perspective, you’re in a bidding war for every job before you even pick up the phone.

These platforms are getting more expensive every year. Lead costs have risen 10-20% annually across most trades and markets. The platforms know you’re dependent on them, and they price accordingly.

And the trend isn’t reversing. As private equity pours money into home services, PE-backed companies bid aggressively on these same platforms, driving costs higher for everyone. The hidden costs of Angi leads extend well beyond the per-lead price tag.

Every dollar you spend on lead platforms builds zero equity in your business. Stop paying, and the leads stop. There’s no website getting stronger, no organic rankings climbing, no referral network growing. You’re renting demand month after month.

Your own pipeline is an appreciating asset

A website with strong local SEO rankings generates leads 24/7 at zero marginal cost. After the initial investment in building and optimizing the site, every organic lead is essentially free.

Your Google Business Profile generates calls and direction requests without you paying per click. Reviews accumulate over time, making your profile more attractive to homeowners every month.

A referral system compounds. Every happy customer becomes a potential source of 2-3 more customers. Each new relationship expands your network.

These channels share one critical characteristic: they get cheaper and more effective the longer you invest in them. The opposite of lead marketplaces, which get more expensive every year.

The comparison of lead marketplaces breaks down exactly how each platform stacks up, but the pattern is consistent. Platform costs rise while your own pipeline costs decrease.

The close rate gap tells the whole story

Shared leads from Angi or Thumbtack close at 10-15%. Your own pipeline leads close at 40-60%.

That 4x difference in close rate changes the math on everything.

100 shared leads at $50 each = $5,000 spent. At a 12% close rate, you book 12 jobs. Cost per acquisition: $417.

100 exclusive leads from your own website = $0 marginal cost. At a 50% close rate, you book 50 jobs. Cost per acquisition approaches zero (just the ongoing SEO investment amortized across all leads).

Even accounting for the monthly SEO investment of $1,500-3,000, the cost per acquired customer from organic leads is a fraction of what you pay through platforms.

Why do exclusive leads close so much better? The homeowner did their own research. They read your reviews, looked at your website, and decided to contact you specifically. They’re not fielding calls from four other contractors. They’re not in comparison shopping mode. They already chose you.

Why contractors stay on platforms anyway

If the math so clearly favors building your own pipeline, why do so many contractors keep buying leads?

Immediacy. Turning on Angi leads takes a phone call and a credit card. Building organic rankings takes 6-12 months. When you need work next week, platforms deliver.

Simplicity. Platforms handle the marketing. You just answer the phone. Building your own pipeline means understanding SEO, managing a website, generating reviews, and tracking attribution.

Fear of the gap. Turning off platform leads before your own pipeline is producing creates a scary gap in your lead flow. Most contractors can’t afford to go cold turkey.

These are legitimate concerns. But they’re reasons to plan your transition carefully, not reasons to stay dependent on platforms forever.

How companies get trapped

The dependency cycle works like this:

You sign up for Angi because you need leads. Some leads come in. You close a few jobs. You increase your budget. More leads come in, but costs rise too. Your profit margins on platform-sourced jobs shrink.

You spend so much time chasing platform leads that you never invest in building your own channels. Your website sits untouched. Your Google Business Profile has outdated photos. You haven’t asked for a review in months.

Now you’re stuck. Platform costs keep climbing, your margins keep thinning, and you have no alternative lead sources to fall back on. The platform knows this and prices accordingly.

Companies dependent on lead platforms are vulnerable to price changes, algorithm shifts, and policy updates they have zero control over. One pricing change from Angi can blow up your entire business model overnight.

Read about competing with Angi and Thumbtack to understand the full economics of this dependency.

The transition plan

You don’t have to quit platforms cold turkey. A phased transition protects your lead flow while building something better.

Phase 1: Fix your foundation (Months 1-3)

Keep your platform leads running. Simultaneously, invest in the basics that make your own pipeline work.

Optimize your Google Business Profile. Complete every field, upload recent photos, respond to every review, and post weekly updates. A strong GBP generates calls without any per-lead cost.

Fix your website. Make sure you have dedicated pages for every service you offer and every city you serve. Each page should target specific searches homeowners make. If your website is outdated, consider what pages contractors actually need to convert visitors.

Start generating reviews systematically. Ask every customer. Make it easy. Reviews compound over time and directly impact both your Google rankings and your close rate.

Phase 2: Build organic momentum (Months 3-8)

Your GBP should be generating more calls by now. Your website pages are starting to get indexed and rank for local searches.

Invest in local SEO. Target the keywords your customers actually search. “[Service] + [city]” terms are the bread and butter. Build content around the questions homeowners ask before hiring a contractor.

Launch a referral program. Formalize the process of asking happy customers for referrals. Even a simple program where you send a thank-you gift for every referral that books doubles your word-of-mouth leads.

Track everything. You need to know which channels produce leads so you can allocate budget intelligently. Lead capture tools and proper attribution show you exactly where your leads come from.

Phase 3: Shift the balance (Months 8-12)

By now, your own pipeline should be generating measurable leads. Start reducing platform spend.

Cut your lowest-performing platform first. If Thumbtack produces worse ROI than Angi, reduce Thumbtack budget and redirect that money to SEO or your referral program.

Reinvest platform savings into owned channels. Every dollar you pull from lead platforms should go toward strengthening your organic presence. More content, better landing pages, review generation campaigns.

Monitor your total lead volume. Make sure you’re not creating a gap. If organic leads aren’t replacing platform leads fast enough, slow the transition.

Phase 4: Platform leads become supplemental (Month 12+)

Your own pipeline should be your primary lead source. Platform leads become supplemental, used only to fill slow periods or test new service areas.

Some contractors keep a small platform budget permanently. In slow seasons or when expanding to new areas, platforms provide quick volume while organic catches up. The key is that platforms are no longer your lifeline.

Alternative lead generation channels

Your own pipeline isn’t just SEO. Multiple channels work together to create a steady flow of exclusive leads.

Neighbor marketing turns every completed job into a prospecting opportunity. The neighbors saw your truck, heard the work, and are thinking about their own projects. A door hanger and a quick knock can generate 2-3 additional leads from a single job site. Explore alternative lead generation methods to find channels that fit your business.

Email and text follow-up with past customers keeps you top of mind. A quarterly maintenance reminder or a seasonal tip generates repeat business at near-zero cost.

Direct mail targeted to neighborhoods where you’ve completed recent work has a 90% open rate. Postcards sitting on kitchen counters generate calls weeks or months after delivery.

Review-driven visibility makes your Google Business Profile the first thing homeowners see. More reviews mean higher rankings, more clicks, and more calls. The Thumbtack Pro experience shows why platform reviews don’t transfer when you leave, making your own Google reviews far more valuable.

The long-term math

After 12 months of building your own pipeline, here’s what the numbers typically look like:

Platform leads that used to cost $50-85 each have been partially replaced by organic leads that cost $0 per lead. Your blended cost per lead drops by 40-60%.

Close rates improve because a higher percentage of your leads are exclusive instead of shared. Revenue per lead increases because you’re not competing on price against four other contractors.

And your pipeline keeps getting stronger. Every month of SEO investment compounds. Every review builds credibility. Every referral expands your network.

The contractors who build their own pipelines aren’t just saving money on leads. They’re building a business that has real value, one that could be sold someday for a premium because it generates its own demand instead of depending on rented platforms.

Start building now

You don’t need to stop buying leads tomorrow. But start building something you own today.

Every month you wait is another month your competitors are strengthening their organic presence, accumulating reviews, and building referral networks that will eventually make platforms irrelevant.

The 6-12 month investment in your own pipeline pays off permanently. Platform leads will only get more expensive. Your own pipeline only gets cheaper.